Dive Brief:
- The Container Store plans to open two new stores in Virginia this summer. The first is set to open on Saturday in Springfield. The second store is scheduled to open on July 27 in Ashburn, the company said in a Tuesday news release.
- The new small-format store locations will include a design center and The Container Store’s Custom Spaces Studio, which showcases customizable closet, living and garage products. The Springfield and Ashburn locations will bring The Container Store’s presence to six Virginia locations and 104 nationwide, the company said.
- CEO Satish Malhotra said during The Container Store’s last earnings call that custom spaces is a growth opportunity for the retailer, with a potential to expand that offering from 40% of sales to 60% of sales through an expanded assortment, and increased in-store and in-home services.
Dive Insight:
Earlier this month, The Container Store expanded its Custom Spaces offering with the launch of Decor+ by Elfa, a wall-hanging product line that’s designed for offices and closets. The retailer in late 2023 also launched a garage-focused product as part of its Elfa subsidiary product line.
“Our differentiated offering of custom spaces, complementary organizing solutions and in-home services is a retail experience customers can’t find anywhere else, and we are pleased to bring this offering closer to customers in Springfield and Ashburn who have shopped at our surrounding locations,” Jennifer Pape, the company’s senior vice president of stores, said in a statement.
The home organization retailer’s current Virginia presence is centered around DC, except for a location in Richmond, which is about 100 miles south of Washington. The company previously said it planned to open four new small-format stores in fiscal year 2024. The Container Store did not immediately respond on Tuesday to questions from Retail Dive regarding the square footage of the new stores or how many people they would employ.
The product launches and store openings come amid challenges for the retailer. Chief among them — The Container Store’s net sales and comps were down double digits in the fourth quarter and for fiscal year 2023.
The company reported in May that its annual consolidated net sales fell 19% year over year to $847.8 million. Net sales for the company’s TCS segment, which includes retail stores, the website and in-home services, fell 19.2% to $801.4 million. E-commerce also fell nearly 24%, as did store comps, which declined nearly 20%. The company posted a net loss of $103.3 million for 2023, down year over year from $158.9 million.
The New York Stock Exchange also notified the company in May that it risks delisting after the company’s stock price fell below the required trading threshold for more than 30 consecutive trading days. The Container Store suspended its financial guidance and said it’s considering a reverse stock split to remedy the situation.
Still, the company has “tremendous untapped potential on the brand awareness front, especially as it relates to our custom spaces capabilities,” Malhotra said in May. Malhotra said building awareness of that offering will be a focus this year.
